The IT manager should configure the Intrusion Prevention System (IPS) in "fail-open" mode. In fail-open mode, if the IPS fails or encounters an error, it allows all traffic to pass through uninterrupted. This ensures that network operations continue even in the event of an IPS failure, minimizing potential downtime or disruption to services.
In contrast, if the IPS were configured in "fail-closed" mode, it would block all traffic in the event of a failure, which could lead to significant disruptions in network operations. Therefore, for the requirements stated by the IT manager regarding ensuring traffic continuity during a failure, fail-open mode is the appropriate choice.